There are several reasons for dissolving a corporation. It could be due to bankruptcy, an internal dispute, among other reasons.
Suppose you are a business owner and decide to cease your business’s operation. In that case, there are many things that you have to do before your corporation is officially out of business. You don’t just simply stop and then disappear.
With that said, here are the things you should know when dissolving a corporation in Ohio.
What It Means to Dissolve an Ohio Corporation
There are some steps a business owner must follow to dissolve his corporation. There may be a few differences between the processes in different states, but most of the steps are similar. Despite the variations of the steps in other states, you must follow the steps below.
- The first step in dissolving a corporation is to hold a board meeting with all the board members present. They all must be aware of the initiative to dissolve the corporation.
Despite the initiative, there must still be a resolution in which most of the board members approve to dissolve the corporation. The shareholders may also need to take part in the voting, but that depends on your organization’s structure. This process must be thoroughly recorded and then stored in the corporate record.
- After this, proceed to the Ohio Secretary of State to file the Certificate of Dissolution by Directors, Shareholders, or Incorporators which will be discussed below.
- Next, you have to complete all of the IRS tax requirements with the State of Ohio.
- After this, all your business licenses and permits must be canceled, and all your business bank accounts must be closed.
- Lastly, concerning your employees, vendors, customers, and everyone who has a connection to the company, notify them of the initiative to dissolve the company.
These steps are easy enough to understand, and you should have no trouble going through with each of them. The only step in this process, which causes the most confusion and is the most complex, is the Articles of Dissolution which will be discussed further in the section below.
Dissolving an Ohio Corporation by the Board of Directors
As discussed above, the first step of dissolving a corporation is by holding a meeting and informing all board members of the plan to dissolve the company.
For those corporations in the state of Ohio that have initiated business and have already issued shares, they need to proceed to the Ohio Secretary of State to file the Certificate of Dissolution by Directors, Shareholders, or Incorporators.
When filling up the Articles of Dissolution, you will need to put in some information for the forms you’ll be submitting. This includes the following:
- the name of your corporation
- the names, addresses, and the positions held by the corporate officers
- the date of the authorization of the dissolution
- the addresses and names of the corporate directors
- the date to which the dissolution was filed
- the date to which the dissolution will be effective
- the signature of the representative authorized by the company.
In addition to filing for a Certificate of Dissolution, you’ll need to send the Ohio Bureau of Workers’ Compensation and the Ohio Bureau of Job and Family Services a written notice of Corporate Dissolution. You’ll also need to get tax clearance from the Ohio Department of Taxation, which you can do by filing for Dissolution or Surrender Notification. Lastly, you’ll file a notarized affidavit and a notarized affidavit of personal property (both are included in the Certificate of Dissolution) with the Ohio Secretary of State as proof that all the departments involved in the process have been notified.
Mail all the documents and a 50 dollar check that is payable to the Ohio “Secretary of State” to the address:
Ohio Secretary of State
P.O. Box 1329
Columbus, OH 43216
You can choose to use the expedited service by paying an extra 100 dollars and mailing your documents and checks to the address:
Ohio Secretary of State
P.O. Box 1390
Columbus, OH 43216
It should take the Ohio Secretary of State 4 to 6 business days to complete the process if you paid the standard fee. However, expedited service will take 1 to 2 business days to be processed.
Dissolving an Ohio Corporation by the Incorporators
There are instances wherein a corporation is dissolved before issuing the shares or before any business transaction has ensued. In these cases, it is the incorporator’s responsibility to spearhead the initiative of dissolving the corporation.
For all those corporations in the State of Ohio that have not yet issued shares or had any business transaction, you will need to follow the same instructions outlined above. You’ll submit the document to the address above. The duration of time it takes is the same as above.
Dissolving a Corporation in Ohio: Other Things You Should Know
In the State of Ohio, your business name is protected for 1 year after the dissolution of your business, which means that your business name cannot be claimed by any other person/business until a year has passed since the dissolution.
There are some instances wherein Ohio State will be the one to initiate dissolution. This is known as administrative dissolution or involuntary dissolution.
This can happen if a corporation or a company refuses or fails to submit its annual reports by the deadline. If you are subjected to involuntary dissolution, you have the option to reinstate your business.
Whether you plan on dissolving your corporation, which has already issued shares and has started making business transactions, or a corporation that hasn’t commenced business yet, the process remains the same in the state of Ohio.
The only significant difference is in the form that you need to file. Hopefully, this article has been a great help to you in dissolving your corporation in the State of Ohio.